PETALING JAYA: The next government will need to continue its predecessor’s efforts to reduce costs of living and strengthen food security, say economists.
In July, Prime Minister Ismail Sabri Yaakob said Malaysia would spend a record RM77 billion on subsidies this year, more than double the original allocation of RM31 billion.
Challenges such as the Covid-19 pandemic, climate change and the fallout from the Russian invasion of Ukraine have put even more pressure on food security in the country.
In response, the government introduced a flexible ceiling price that changes according to price input factors and financing schemes for farmers worth RM1 billion.
“There is no doubt the RM77 billion in subsidies is important to help the people as many are still struggling (after the Covid-19 pandemic),” said Barjoyai Bardai of Universiti Tun Abdul Razak.
“It is still needed, (though) there is room for improvement in terms of more targeted subsidies,” he told FMT.
Barjoyai said he hoped the next government would continue its predecessor’s efforts with medium and long-term plans to boost food security and reduce dependency on imports.
In Budget 2023, the agriculture and food industries ministry was allocated RM1.8 billion specifically for subsidies and incentives for the rice and fishing industry.
To increase food production, Budget 2023 included plans to utilise up to 800 acres (324ha) of idle land owned by Felda, Felcra, Risda and agencies under the agriculture and food industries ministry for food crops.
Sunway University professor of economics Yeah Kim Leng noted that food security and subsidies had to remain among the country’s top priorities moving forward, especially in the aftermath of the Covid-19 pandemic, geopolitical risks and climate change.
Like Barjoyai, he was also in favour of more targeted subsidies so that more resources could be spent on those who need them most.
“The next government is expected to continue not only strengthening food security and subsidy rationalisation but also public health and social security,” he said.
“The poor and vulnerable groups have been more severely impacted by the pandemic and rising inflation, (and) subsidies that are targeted at these groups are important to cope with rising living costs and reduced income inequality.”